Treasury

Intercepting authorised push payment fraud

Bim Afolami: The government takes the issue of fraud very seriously and is dedicated to protecting the public from this devastating crime. According to UK Finance, in the first half of 2023 alone, there were 116,324 cases of authorised push payment (APP) fraud, where a payer is deceived or defrauded into authorising a payment to a criminal.To help combat fraud, the government is working with industry to remove the vulnerabilities that fraudsters exploit, with intelligence agencies to shut down fraudulent infrastructure, with law enforcement to identify and bring the most harmful offenders to justice, and with all partners to ensure that the public have the advice and support they need.Today, the government has published draft legislation setting out its approach to allowing payment service providers to delay the processing of authorised push payments executed within the UK in sterling in circumstances where it appears there has been fraud or dishonesty. This fulfils a commitment in our ambitious Fraud Strategy to investigate this issue.Currently, for most transactions, the Payment Services Regulations 2017 require that an outbound payment is processed by the end of the business day following the time of receipt of the payment order. The draft statutory instrument published today sets out that the government intends to allow payment service providers to delay the processing of in-scope payments by up to four business days from the time of receiving the payment order. This will only be permissible where there are reasonable grounds to suspect a payment order from a payer has been placed subsequent to fraud or dishonesty perpetrated by someone else (excluding the payer) and those grounds are established by no later than the end of the next business day following receipt of the payment order. The delay may only be used where the provider requires further time to contact the customer or a third party, such as law enforcement, to establish whether to execute the payment.Payment service providers will be required to inform customers of any delays, the reasons behind their decision to delay the payment, and what information or actions are needed to help the payment service provider decide whether to execute the order. However, this will not be required when doing so would be unlawful, for example, when doing so will contravene obligations under anti-money laundering or economic crime law.The thresholds for any delay will ensure that payment service providers must have an evidential basis to delay a payment, whilst ensuring that suspicious payments are properly investigated and rejected as required. To help ensure that consumers and businesses do not incur any costs as a result of any delays to their payments, payment service providers will be liable for any interest or charges incurred by the payer resulting from a delay.This measure only applies to authorised push payments executed within the UK in sterling. Small, medium, and large businesses, which may have numerous obligations to make timely payments to suppliers, will be able to opt out of these provisions with the mutual agreement of their payment service provider.To monitor the impact of this legislation and ensure it is used in a proportionate manner, the FCA will engage with payment service providers over reporting requirements in respect of compliance with the new provisions.This legislation does not make any changes to the Payment Services Regulations 2017 with regard to inbound payments, whereby a payment service provider receives a payment from another payment service provider. This is because there are already obligations under financial crime legislation for payment service providers to delay inbound payments in certain circumstances. Therefore, the government considers that legislative change for inbound payments is not required.The government welcomes feedback on the drafting of this SI by 12 April 2024 and will engage with the financial services industry on this. The Government will then lay these regulations before Parliament in summer 2024. It is intended that these regulations will come into force by 7 October 2024 to align with the Payment Systems Regulator’s timelines for the introduction of mandatory reimbursement for APP scams.The draft legislation and an accompanying policy note can be found at the below link https://www.gov.uk/government/publications/the-payment-services-amendment-regulations-2024-policy-note

Department for Culture, Media and Sport

Receipt of reports on anticipated acquisition of Telegraph Media Group

Lucy Frazer: Today I can confirm that I have received reports from the Competition and Markets Authority (CMA) and from Ofcom on merger situations involving Telegraph Media Group Ltd (TMG). These reports were provided in response to the Public Interest Intervention Notices (PIINs) I issued in the anticipated acquisition of TMG by RedBird IMI on 30 November 2023 and RB Investco Limited on 26 January 2024 respectively.The PIINs required the CMA to report to me on my jurisdiction to intervene in these merger situations, and if any competition concerns may arise as a consequence. They also required Ofcom to assess and report to me on the need for accurate presentation of news and free expression of opinion in newspapers.Next, I will decide, in a quasi-judicial capacity, whether or not I am minded to refer this merger for a further investigation by the CMA.I will aim to publish the CMA and Ofcom reports and make a further statement on any decision I may come to as quickly as possible.In the meantime, given the ongoing quasi-judicial nature of this process, I am unable to comment substantively on the matter of this case.

Department for Energy Security and Net Zero

REMA Second Consultation

Claire Coutinho: After a period of unprecedented disruption and change, our energy sector is now poised to seize the opportunities of the energy transition. We have become the first major economy in the world to halve our emissions, and today we are seeking to build on that progress with the Review of Electricity Market Arrangements (REMA) second consultation. The options in this consultation could save consumers tens of billions of pounds. It will ensure our electricity markets are fit for the future, and to prepare our electricity system for full decarbonisation by 2035, subject to security of supply. Reforming the electricity market is key to delivering a low-cost system, driving down both the cost of power itself and the infrastructure needed to deliver it to consumers. The first REMA consultation sought views on the case for change, programme objectives, and a wide range of options. This consultation sets out a much sharper vision for our future electricity market arrangements, significantly narrowing down the remaining options.The reform options in this consultation have the potential to save tens of billions of pounds from consumer’s bills. Doing nothing is not an option. Existing arrangements will get harder to operate and could lock in a high-cost path to transition. Our analysis suggests that reforming our electricity markets could reduce overall system costs by £35 billion from 2030 to 2050. This is also an opportunity to unlock massive investment in a cost-effective and secure energy system. An estimated £275-375 billion in new capacity may be required. Achieving this will require the private sector to work alongside government, the regulator, and the system operator to help design future markets to encourage large-scale investment. We are also taking the steps necessary to futureproof the country’s energy security and keep the lights on. With electricity demand set to rise and existing gas plants nearing the end of their lives, the government will support limited newbuild gas capacity in the short-term for when the sun isn’t shining, and the wind isn’t blowing. This is a sensible insurance policy and independent analysis demonstrates that unabated gas generation will continue to play an important part in the 2030s. The government has already passed laws requiring new gas plants to be built ready to convert to low carbon alternatives in the future, and running hours will continue to reduce as more renewables come online. This means the plans will not add to projected emissions and are entirely in line with the UK’s world-leading carbon targets. The next phase of the REMA programme will finalise the remaining policy options. We expect to provide a summary of responses in summer 2024 and move into full-scale implementation from 2025.